Adaption to Climate Change through Water Trading under Uncertainty - An Inexact Two-Stage Nonlinear Programming Approach

Abstract

Shifting hydrological phenomenon under changing climate would lead to decreased water availability, and thus would worse water supply-demand conflicts resulting in penalties on local economy. To tackle water shortage problems, water trading has been proved as an efficient and economical method. However, complexities and uncertainties in water trading system may result in its poor efficiency and improper management. To address these concerns, an inexact two-stage stochastic nonlinear programming (ITSNP) model is proposed for water resources management through water trading under uncertainty. The ITSNP model can reflect nonlinearity of the problems, incorporate uncertainties expressed as probability distributions and discrete intervals, and provide linkages between predefined policies and associated economic implications. The developed model is applied to a case study of water resources management of an agricultural system with and without water trading schemes. The obtained modeling solutions indicate that water resources management is more efficient with water trading than without water trading particularly during dry seasons. Moreover, it is found that water trading is a suitable method for adaptation to climate change impacts under water scarcity.

Keywords: Adaptation, climate change, inexact, management, nonlinear, two-stage stochastic, uncertainty, water trade